DOE gets earful from smart grid companies over stimulus

Energy Secretary Steve Chu and the rest of the Department of Energy hear …

Back in April, the Department of Energy issued a Notice of Intent of its plans to use stimulus money to fund smart grid projects. In order to get things moving quickly, the DOE had a short timeframe for public comments. Nevertheless, a variety of companies and groups provided their input before the deadline, and the DOE has already acted to implement some of their suggestions. We've gone through some of the feedback provided to the DOE and talked with Loraine Hariton, Director for Public Policy at Echelon and part of the Demand Response and Smart Grid (DRSG) Coalition, to get some feel for how the industry views the DOE's proposed funding.

According to Hariton, the focus of the feedback, both from her organization and others, is to help ensure that the DOE spends its money in a way that's more consistent with the overall goals. "We're saying 'Let's enable what the stimulus package is trying to do," she said, "let's focus on that." And, while there is some obvious self-interest and difference in focus, that seems to be a reasonably accurate statement.

There was almost uniform agreement on one aspect of the NOI: the ceiling on grants, capped at $20 million, was too small to provide the sort of major infrastructure investments that the stimulus was ostensibly designed for. As a result, Monday saw Steven Chu announce that the cap had been raised to $200 million. Demonstration projects also got a raise, going from a $40 million cap to $100 million. This should go a long way towards enabling larger deployments.

Another major issue, highlighted both by Google and the DRSG, was that the NOI had little in the way of assurances that smart grid hardware would actually wind up in the hands of consumers (both individuals and institutions). There's a degree of self-interest in this, as the DRSG contains a number of hardware makers, and Google's focus on displaying data to consumer-level users mean that its smart grid efforts need hardware in place before there's anything to display. Still, the administration has apparently promised to have 40 million smart meters in place, and the DOE's stimulus spending provides no obvious path for getting there.

Things are a bit more complex when it comes to interoperability requirements. Google simply wants them in place, since the company would be happier if it could interface with all the data it wants to obtain via a single method. The DRSG is afraid that the standards that the DOE proposed to use are currently a work-in-progress; that concern is shared by the GridWise Alliance, which is somewhat ironic, given that the DOE had initially proposed to use standards developed by GridWise. The DOE has since announced that it will be going with standards developed by the National Institute of Standards and technology. It's not clear that this step will make anyone happier, as the NIST also calls its standards a work-in-progress, and is using a Wiki to develop them.

Both the DRSG and GridWise argue that a number of problems arise from the tendency of the DOE's proposal to treat the whole thing as a way of gathering information. "This comes from the fact that the office of electricity, which wrote this, is a very small office of only four people," Hariton told Ars, "and it's staffed by people who think from a scientific standpoint, and asked for a lot of information as if they're science experiments."

Part of the issue is that we should be past this already; the DRSG notes that "pilots have been done on most aspects of smart grid, in particular customer acceptance and participation. Proven technologies are available." But there are also some complaints about specific requirements. For example, GridWise argued that some disclosures expected as conditions of funding may reveal proprietary business information or go against security best practices. The DRSG notes that an expectation that programs randomize deployments across their customers would make it much more expensive to roll out the communications networks needed for smart grid devices.

Finally, there are issues regarding some of the proposed work with demand-response management and variable pricing. These often require approval by local or state utility boards, and the DOE doesn't allow for any mechanism for navigating what might be overlapping requirements.

Still, Hariton emphasized that it would be unrealistic to expect a perfect document on the first pass. She said that she recalled that, last year, the group that formulated the NOI had a budget of $160 million, so this represents a radical change for them. Still, the document they produced is apparently a decent foundation. "I think this was a first draft," Hariton said, "they're moving in the right direction, and we hope that this will all come back as a more effective document."